President of India Dissolves Parliament, Midterm Vote Set

President K.R. Narayanan dissolved Parliament Thursday and ordered a
midterm vote by the middle of March, setting the stage for India's second
national election in less than two years.

The decision ended two weeks of political uncertainty and followed a
recommendation Wednesday by the cabinet of caretaker Prime Minister I.K.
Gujral. His coalition government collapsed last week when the Congress
party withdrew its support. No new alignment emerged that could command a
majority in the 545-member lower house of Parliament, despite days of
inter-party negotiations.

Narayanan said "the people of India need a reprieve from political
instability" and deserve a government focused on their "well-being and
betterment."

But analysts predicted the election will result in another coalition
government as India continues a transition to competitive politics from the
single-party dominance of Congress, which ruled for 45 of the 50 years
since it led India to independence from Britain in 1947.

India's already slow movement toward a more open economy will be
suspended during the months of election campaigning as bureaucrats postpone
decisions on policy issues and investment proposals until a new government
is installed. Already, the aborted winter session of Parliament took no
action on pending legislation, including bills to introduce private
competition in insurance and to regulate the satellite television
industry.

The political instability also has contributed to a drop in India's
currency, the rupee, to historic lows.

Congress withdrew support from the ruling coalition because an official
report accused a United Front partner, the Tamil-based Dravidian
Progressive Federation, of abetting the Tamil terrorists from Sri Lanka,
who are suspected of assassinating former prime minister Rajiv Gandhi in
1991. Congress and the United Front failed to reach a compromise allowing
Congress to resume its backing from outside the government.